Journal of Legal, Ethical and Regulatory Issues (Print ISSN: 1544-0036; Online ISSN: 1544-0044)

Abstract

An Overview of Bitcoin's Legal and Technical Challenges

Author(s): Rehana Parveen, Alanoud Alajmi

This paper examines Bitcoin from a legal and regulatory perspective, answering several important questions. Bitcoin has been the focus of the forums for the past few years by causing a whirlwind of arguments in a various number of fields all over the globe, such as finance, technology and most importantly the legal field. Currency’s evolution through time has been steady and sturdy, but after the creation of crypto currencies, the whole ground structure of a traditional currency has been shattered and transformed dramatically thus changing the core qualities of currencies with its intangibility, anonymity and decentralized nature which are considered as the main merits of Bitcoin as a cryptocurrency. But on second thought, these benefits arose huge complications on both the legal and financial surface where illegal activities from criminals and drug addicts take place by using Bitcoins as a currency, such as fraud, money laundering and terror finance. On the other hand, lack of trust among individuals and merchants in Bitcoin users is the prime factor leading to theft. Nations around the world started to work on defining the nature of Bitcoin in order to regulate crypto currencies in general with a sound legal framework because with great power comes great responsibility to protect citizens from the risks accompanying Bitcoin. The focus of the paper is to cover positive aspects of Bitcoin as a currency and mainly the controversy circling around Bitcoin’s regulations. The focus of this paper is to examine legal and technical issues and current international legal status regarding Bitcoin as a crypto currency and recent legal developments affecting Bitcoin, based upon their actual use.